Free Work Entices Businesses to Hire Long-Term Unemployed: Jobs

The five-week P2E program is focused on honing job search skills, including training on social media such as LinkedIn and the development of an individual’s 30-second “elevator pitch” to outline his or her job skills. Photographer: John Moore/Getty Images

Aug. 15 (Bloomberg) -- After conducting almost 10,000 job
interviews during 10 years as a human resources manager, Tom
Kaminski says he thought he knew enough about the labor market
to keep his own bout of unemployment short.

Instead, he wound up out of work for three years before
enrolling in Platform to Employment, or P2E, a privately-funded
Connecticut program to help long-term unemployed workers land
jobs. The attraction for employers: A fully paid-for audition of
as long as eight weeks for job applicants who complete the five-week program.

He stands a better-than-even chance of finding work,
judging from the program’s success rate. Of the 131 graduates of
the first seven classes, 91, or 69 percent, moved to full-time
employment. P2E has expanded to Dallas, Cincinnati, San Diego,
Chicago and Newark, New Jersey, and efforts are under way to add
another five cities by year’s end, helped by funding from AARP,
CitiGroup Inc. and Wal-Mart Stores Inc. Joe Carbone, who started
P2E, says the free tryout gives businesses a bigger incentive to
hire than typical government job-help programs.

“For 40 years, this system has produced tax credits, on-the-job training -- they’re junk,” said Carbone, president and
chief executive officer of The WorkPlace, a regional workforce
development agency that runs the P2E program in Connecticut.
“Businesses don’t care about them anymore. They’re not going to
be lured to expressly looking for a long-term unemployed person
for a job replacement because of a $4,000 tax credit.”

Marketable Skills

What they do care about is P2E’s no-strings-attached offer
of applicants with marketable skills who are suited for a posted
job opening, Carbone said. If an employer decides to grant a
tryout after the graduate completes the normal interview
process, P2E pays the pro-rated portion of as many as eight
weeks of the listed salary to allow the business to assess a
possible hire.

Maria Batista, training director for EMGC Training Inc. in
Derby, Connecticut, hired two P2E graduates. Her company, which
provides instruction for environmental services such as home
weatherization, accepted the full eight-week wage subsidy for
one of the new hires.

“It does help the people who are down, who have been out
of work,” she said. “You see the self-esteem boosting because
they’re back in the workforce.”

What’s more, she said, “giving money to employers to take
them on does help because the economy is bad.”

Elevator Pitch

The five-week P2E program is focused on honing job search
skills, including training on social media such as LinkedIn and
the development of an individual’s 30-second “elevator pitch”
to outline his or her job skills. A daily routine of workshops
and classes -- including homework -- is meant to help
participants adopt a frame of mind akin to the schedule of a
full-time job.

Kaminski, 42, who until May 2010 worked in the Stamford,
Connecticut, office of Stockholm-based Securitas AB, said his
three years out of work showed him the labor market had
undergone big changes.

“It’s a perfect storm” of increased global competition,
sluggish demand, technological advances and the rising expense
of keeping employees on the payroll, he said. “When I got out,
I discovered I did not know quite as much as I thought I did.”

Long-term unemployed -- those out of work 27 weeks or
longer -- make up 37 percent of the 11.5 million jobless -- more
than double the 14.8 percent average in records going back to
1948. While the jobless rate, at 7.4 percent, is at its lowest
level since 2008, Federal Reserve Chairman Ben S. Bernanke calls
labor market conditions “far from satisfactory,” and long-term
unemployment is a primary reason.

Jobless Duration

The average duration of unemployment increased to 36.6
weeks in July, its 31st month above 35 weeks. That figure has
averaged 25.5 weeks in the last 10 years. Some of the 4.2
million Americans who have been out of work for longer than six
months may be dipping into savings or losing their homes or
cars, restraining the consumer spending that makes up 70 percent
of the economy.

“They start to deplete their assets and they get poorer
and poorer and poorer,” eventually becoming eligible for
welfare programs, Carbone said.

Wide income disparities in Connecticut, among the
wealthiest states in the nation, help make it one of the
toughest environments for the unemployed, according to data
compiled by Bloomberg. The Bloomberg rankings show a relatively
low rate of benefits as a percentage of income, high competition
among the jobless and the third-highest ratio in the country of
annual household incomes above $200,000 compared with those
below $10,000.

Heavy Competition

There were more than 2,000 applicants for the July P2E
class of 22 in Bridgeport, Connecticut. Including the
Connecticut classes and groups in the cities planned for
expansion, P2E has raised about $2.47 million.

Each class of about 20 students typically requires about
$120,000, or $6,000 per participant, of private funding, said
Tom Long, P2E’s vice president of marketing and communications.
Donors for the Connecticut classes have included corporate
sponsors and individual givers, while three names have dominated
fundraising for the national expansion.

AARP has pledged $1 million, or $100,000 for programs to
support participants aged 50 and older in each of the 10 cities
set for expansion, and has delivered about $400,000 of that
pledge, said Long. Citi Community Development, part of
CitiGroup, has said it will donate $300,000 for financial
literary classes and counseling in each of the cities. Wal-Mart
has started investing toward its pledge of $250,000 to support
unemployed veterans under age 30.

Information Technology

Among the applicants to P2E’s next Connecticut class is
Richard Freitas, 53, who worked for 17 years as an aircraft
mechanic at Stratford, Connecticut-based Sikorsky Aircraft Corp.
He then held a series of information technology jobs before he
was let go from a post at Duracell Inc. in July 2010.

“The longer you’re out of work, the less chance you have
of getting a job,” Freitas said. “I was told by a recruiter
that ‘since you’ve been out of work for three years, in the
information technology field that you’re in, we feel that you’ve
lost touch with the operating systems and the hardware and
software.’” He said he’s kept his IT skills up-to-date through
online measures such as Dell Inc. certifications.

Yellen Paper

Fed policy makers have long warned of the effects of
extended joblessness. Vice Chairman Janet Yellen, whom President
Barack Obama has mentioned as a candidate for the chairmanship
when Bernanke’s term expires in January, wrote about the problem
in 2004, when she was president of the San Francisco Fed.

“Policy makers should be compelled to take action given
the serious costs of long-term unemployment when overall
unemployment is already high,” she wrote in a paper with her
Nobel Prize-winning husband, George Akerlof, in a year when
unemployment averaged 5.5 percent. “A week of unemployment is
worse when it is experienced as part of a longer spell.”

Kaminski, the former human resources manager, said he’s
optimistic about landing a job after having an interview earlier
this week and several telephone interviews last week.

“I’m hoping something’s going to break in the next couple
weeks,” he said.